Your Parents become your child once you grow up. Life becomes very hard for them especially after retirement.They are no longer an earning member for the family.Once you grow up, you have to support them in each possible way.
Here are 7 ways by which you can help them financially:
#1. Know the relevant documents and where they are
Assemble details of all financial documents and information in one place. You might not need all but you should know how to access them with your parents permission.
The financial information would include:
- Bank account numbers
- Safe deposit boxes
- List of family financial professionals like accountants, lawyers
- Medical information
- Mortgages and other loans
- Insurances and premiums
- Property Taxes
- Credit Cards
- Pension and Annuity Benefits
- Tax Returns
- Utilities and other bill payments and due dates, mode of payments
The financial documents would include
- Power of attorney
- House deed
- Insurance contracts
- Assets statement
Please note this list, while detailed, is not exhaustive.
#2. Get access to statements
Make an arrangement with your parents to send you copies of their monthly statements. Access to these statements will help you to keep track of all payments and incomes. This will also enable you to spot any kind of error or possible financial issue at an early stage.
#3. Do an annual review
Review the investments, incomes and their sources on an annual basis. This will help you analyse the flow of money during the year, keep track of any upcoming deadlines or dues, and make an estimate of the inflow in the coming year to plan investments accordingly.
#4. Enable online banking & automatic payment, if relevant
Depending on the periodicity and number of bills, set up online banking, along with an automatic bill payment system, for all regular dues and payments. This will ensure timely and error free payments and transactions.
#5. Assess and discontinue unneeded services
Cancel and discontinue all unnecessary bank accounts, cards, payments and subscriptions. Doing this will ensure ease of management for you and your parents. This will also do away with unnecessary dues and payments being charged on a regular basis.
#6. Ensure health insurance for your parents
Ensure your parents have a good health insurance plan. Check if the insurance covers an existing illness as well as critical ailments, as a lot of insurance plans have clauses that exclude certain ailments and medical conditions. Check all the other general terms and scope of the insurance, including up to what age are they valid.
#7. Assess Retirement Savings
Make a thorough assessment of your parents’ retirement savings. Ensure that savings and investments are working in accordance with your parents’ needs. Keep an eye on your parents’ debt levels; do not allow it to rise to the extent that it compromises your parents’ financial well being.